In-Service Distribution Restrictions

[Guest MrsJones]

I have a client that maintains two Plans: 401(k) Plan and a Profit Sharing Plan.

The client would like to allow for in-service distributions but wants to limit the distribution to ONLY rollovers into the 401(k) Plan. There would be no other restrictions on in-service distributions (i.e., age). Could I amend the PS Plan to allow for this?

[QDROphile]

The important word is "amend." Certain in-service distribution features are protected benefits and can be removed only prospectively. Prospectively means with respect to contributions and related earnings after the amendment. Pre-amendment amounts and related earnings cannot be compromised.

If there are no in-service distribution terms in the plan, you can add in-servce distribution terms limited to rollovers.

[Guest MrsJones]

The important word is "amend." Certain in-service distribution features are protected benefits and can be removed only prospectively. Prospectively means with respect to contributions and related earnings after the amendment. Pre-amendment amounts and related earnings cannot be compromised.

If there are no in-service distribution terms in the plan, you can add in-servce distribution terms limited to rollovers.

Currently there are no in-service distribution terms in the Plan. So if I amend to allow for in-service limited to rollovers ONLY in the same employers 401(k) Plan, I'm safe. Correct?